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EXHIBIT "A" EXAMPLE COMPUTATIONS OF INTEREST REDUCTION PAYMENT AND REFUND OF PORTION OF INTEREST REDUCTION PAYMEN' Example A property owner wishes to borrow $12,800 for a period of fifteen years. As part of the Agency's residential rehabilitation program., the borrower will receive a sub- si'dized interest rate of 6%, as compared to the Bank's market rate (adjusted for this program) of 16.5%. Using the attached table, the procedure for computing the Agency's Interest Reduction Payment (IRP) and refund, in the event of prepayment or foreclosure is as follows: I. EXAMPLE COMPUTATION OF INITIAL !RP Step 1: Find the Agency's initial IRP per $1,000 = $438.8163 Step 2: Divide the principal loan amount by $1,000 to find the loan multiple Loan multiple = 12,800� = 12.8 times Step 3: Multiply the Agency's initial IRP per $1,000 by the loan multiple to find total initial IRP Agency's initial IRP = $438.8163 X 12.8 = $5616.85 II. EWIPLE COMPUTATION OF REFUND OF PORTION OF IRP IN THE EVENT THE LOAN PREPAYS AFTER 5 MONTHS Refund equals the remaining balance of the Agency's IRP per $1,000 (shovin in Table, row 5, column B) times the loan multiple. Refund = $425.163 X 12.8 = $5,442.08 III. EXAMPLE COMPUTATION OF REFUND OF PORTION OF IRP IN THE EVENT THE LOAN IS FORECLOSED AFTER 5 MONTHS To the extent the proceeds realized from foreclosure are sufficient to pay the unpaid loan balance plus bank foreclosure costs, the refund would be equal to the amount computed in Example II., If the proceeds are not sufficient to pay the unpaid balance plus bank foreclosure costs, the refund would be made as follows: - Unpaid balance of borrower's loan $12,577.74 Foreclosure costs (hypothetical) 1,000.00 Total Owed to Bank $13,577.74 Less: Net proceeds realized from foreclosure(hypothetical) 10,000.00 Balance Owed to Bank $ 3,577.74 Amount of IRP remaining (shown in II) $5,442.08 Less: Balance Owed to Bank 3,577.74 Refund due to Agency $1,864.34